Bob Diamond’s investment vehicle Atlas Merchant Capital has teamed up with major US buyout firm Carlyle Group to put together a bid for Barclays’s stake in Barclays Africa Group, according to two people familiar with the situation.

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Bob Diamond

Diamond, who served as chief executive of Barclays and resigned amid the Libor scandal, will use New York-based Atlas Merchant Capital to jointly fundraise with Carlyle, the people said.

Diamond – tipped by analysts as a leading candidate to buy his former bank’s African business since Barclays confirmed it was for sale last month – and Carlyle have not yet submitted a formal offer, the people familiar with the situation said.

The timeline for a deal is uncertain given that Diamond and Carlyle have recently agreed to partner on this bid, and Barclays said in March that it would give any sale two to three years to materialise and would not rush into a fire sale.

A spokesman for Barclays refused to comment. Carlyle Group and Diamond did not immediately respond to calls for comment.

Atlas Mara, Diamond’s African banking group which he co-owns with entrepreneur Ashish J Thakkar, won't be making a bid for Barclays Africa Group because its market capitalisation at London’s AIM index, at roughly $300 million, prohibits it from bidding for such a large entity, a person familiar with the situation said.

Barclays owns 62.3% in Barclays Africa Group and last month announced it would seek to sell down most of that for regulatory reasons. UK banking regulations are making it increasingly burdensome for large banks to own assets in multiple jurisdictions and Barclays’ sale of the African unit will cut the rising costs of complying with this regulation, the bank said when it announced its plans last month. The Wall Street Journal reported news of the move in January.

Analysts estimate the bank will need to sell a stake worth roughly $3 billion, making it a massive banking asset for the African market.

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Barclays Africa Group owns 12 banks across Africa, the biggest of which by far is South Africa-based Absa, one of the country’s largest lenders. With South Africa’s economy slowing down to a near-halt and many key economies on the continent suffering the fallout of low oil prices and diminished Chinese demand for industrial minerals, analysts have questioned the attractiveness of buying the entire group.

And at a roughly $3 billion valuation, it was not clear which single entity would be able to get the cash together to seal a deal.

After Barclays announced it would have to sell the majority of its stake in the African lending group, several local and foreign banks expressed interest in buying single entities within the Barclays Africa Group. Barclays Kenya, for example, attracted open interest from several Kenyan banks who said, if the lender was split away from its family, they would bid for it.

Barclays Africa Group chief executive Maria Ramos, in an interview with The Wall Street Journal in March, said she was not prepared to see the group broken up and sold off parts. The mother company, Barlcays in London, would also prefer the whole chunk to be sold together.

Diamond and Carlyle Group aim to put together a bid to acquire Barclays' share in Barclays Africa Group, not just component parts of it, the people familiar with the matter said.